Fed's Bullard Says Markets Have More Dovish View on Interest-Rate Path

By Michael S. Derby Features Dow Jones Newswires

Federal Reserve Bank of St. Louis President James Bullard warned again on Thursday that the central bank and financial markets aren't on the same page when it comes to the interest-rate outlook.

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The movement of financial asset prices since the Fed's March interest-rate increase shows the central bank's "contemplated policy rate path is overly aggressive relative to actual incoming data on U.S. macroeconomic performance," he said in materials prepared for a presentation in Tokyo, which will happen on Friday local time.

Mr. Bullard, who isn't currently a voting member of the interest-rate setting Federal Open Market Committee, has for some time been a deep skeptic of the need to raise rates. T he Fed is widely expected to boost the cost of borrowing at its June policy meeting, lifting the overnight target rate from its current range of 0.75% and 1%. In recent appearances, Mr. Bullard has said a rate rise or two wouldn't be a big issue for him, but he opposes the central bank's current plan to pursue a series of rate rises over the next few years.

Mr. Bullard said the shortfall of inflation relative to the Fed's 2% target remains "worrisome" but he still expects the economy to remain on a path of about 2% growth. He doesn't expect to see a surge in inflation.

Write to Michael S. Derby at michael.derby@wsj.com

(END) Dow Jones Newswires

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May 25, 2017 22:35 ET (02:35 GMT)